Wed, Sep 04, 2013 - Page 14 News List

Nokia selloff complicates life for local firms: Fubon

SYSTEM SWITCH:Nokia’s selling of its handset unit to Microsoft could force Taiwanese PC and OEM firms to shift to Google’s Android system, a Fubon analyst said

By Helen Ku  /  Staff reporter

Taiwanese PC brands and original equipment manufacturers (OEM) should take extra care when choosing operating platforms for mobile devices in the wake of Microsoft Corp’s acquisition of Nokia Oyj’s handset unit, Fubon Securities Co (富邦證券) said yesterday.

As Microsoft is expected to increase its research and development investment in its Windows mobile operating system after acquiring Nokia’s handset business, PC OEMs may be forced to reallocate their resources to manufacturing products running Google Inc’s Android system, Fubon analyst Arthur Liao (廖顯毅) said in a note.

Nokia has said it is selling its handset business for 5.44 billion euros (US$7.16 billion) to Microsoft — 3.79 billion euros for the device unit and 1.65 billion euros for patents.

Liao said PC OEMs should select the “right” clients and evaluate which operating system for mobile devices will prove to be more competitive to survive in the long run.

Currently, Hon Hai Precision Industry Co Ltd (鴻海精密) and Pegatron Corp (和碩) assemble Apple Inc’s iPhone and iPad products, which run Apple’s iOS platform, while Compal Electronics Inc (仁寶電腦) produces Windows Phones.

“Overall, PC OEMs should maintain the Windows operating system for PC products, but choose Android for mobile devices,” Liao said.

Fubon kept a negative view on Acer Inc (宏碁) and Asustek Computer Inc (華碩), the world’s fourth and fifth-largest PC makers, saying the two have failed to extend their shares of the mobile device market.

The brokerage was also negative on Quanta Computer Inc (廣達) and Wistron Corp (緯創), the world’s top and third-largest contract laptop makers respectively, because they lack big-name smartphone clients.

Meanwhile, smartphone brands like HTC Corp (宏達電), which also manufactures smartphones running Windows, may also face stiffer competition from Nokia, Liao said.

Microsoft is likely to raise its investment in Nokia devices to stimulate the latter’s sales momentum in the near term, which currently accounts for only 3 percent of the market.

“In the long term, both Microsoft and Nokia are likely to continue to struggle to increase their market share,” Liao said.

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